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In this paper I introduce antecedents to innovative behavior in the beginning stages of entrepreneurial venture start-up. Concepts such as self-efficacy, goal-setting, emotion, creativity, and innovative behavior are introduced. I introduce a model that may help predict innovative behavior in the early stages of entrepreneurial venture start-up.
With today's economy and need for successful businesses, the study of entrepreneurs and venture creation should be a top priority. As I sifted through the existing literature on entrepreneurs I noticed that many of the papers were suggesting that there is a lack of studies focusing on the beginning stages of entrepreneurial ventures. Therefore, I decided to answer the calling. I conducted an extensive literature search on topics that could have a significant influence on the early stages of entrepreneurial venture creation. The concepts I investigated include, but are not necessarily limited to, self-efficacy, goal-setting, effort, performance, creativity, emotion, and innovative behavior. With my understanding that innovative behavior can influence the success, or lack thereof, of new entrepreneurial ventures, I have developed a model that proposes antecedents to entrepreneurial innovative behavior (see Figure 1).
Figure 1: The Entrepreneurial Arrowhead
Note: ESE = entrepreneurial self-efficacy; GSE = general self-efficacy; CSE = creative self-efficacy; Affect = both positive and negative emotions; O = combination of task performance and task creativity
Innovation can be studied on both organizational and individual levels. For this paper I will be focusing on innovation at the individual level. This type of innovation will be referred to as innovative behavior (Slatten & Mehmetoglu, 2011). More specifically I will refer to this innovative behavior as entrepreneurial innovative behavior, in that I am focusing on tasks and the behavior of entrepreneurs in the start-up phases of entrepreneurial ventures. Tasks in the start-up phases can include such things as idea generation, locating a place to run the business, identifying customers, making initial sales, and any other everyday task associated with venture creation. Depending on the type of business venture, there can be uncountable numbers of tasks to be done in the early stages of venture creation. I will be proposing and describing possible antecedents to entrepreneurial innovative behavior that takes place in the early stages of venture start-up. I will begin by defining entrepreneur and then will describe the antecedents to innovative behavior, beginning with innovative behavior and working back towards the tail of the entrepreneurial arrowhead that is depicted in Figure 1.
When describing entrepreneurs some people may think of Bill Gates, Donald Trump, or Steve Jobs. But, entrepreneurs are not only the large business magnates and CEO's we hear about in the news. An entrepreneur could be a hot dog vendor, a local family business owner, or a child running a lemonade stand. Almost any business textbook you come across will have some topic about entrepreneurs and entrepreneurship. Citing a few definitions of an entrepreneur, O'Sullivan and Sheffrin (1998) defined entrepreneur as, "a person who comes up with an idea for a business and coordinates the production of sale of goods and services; an entrepreneur takes risks, committing time and money to a business without any guarantee that the business will be profitable." Post and Anderson (2000) identified an entrepreneur as, "someone who starts a business for himself or herself, and also has a new way of doing things or a new product." Grenwal and Levy (2008) stated that an entrepreneur is, "someone who organizes, operates and assumes the risk of a business venture."
Although the three definitions identified above are from three different areas of business textbooks (economics, management information systems, and marketing respectively), it is assumed that one can agree that an entrepreneur is an individual who has responsibility of, or is beginning a business venture. For the purposes of this paper and the proposed model, I will be referring to the entrepreneur as an individual who is beginning their own business venture and/or in the start-up phases of such venture.
I will be focusing on the very early stages of venture creation. From idea generation to initial start-up activities, including, but not limited to, business planning, advertising, marketing, purchasing materials, identifying/contacting customers, making sales, etc. There are numerous amounts of tasks and obstacles entrepreneurs must complete and endure throughout the start-up process. While I am describing the following concepts, imagine yourself attempting to start your own business from the very beginning, all on your own. Whether it be creating and running the best yard sale in town, starting your own successful restaurant, running a small business out of your home, starting a website, or becoming the next Bill Gates; you will be in charge of everything and you assume all responsibility of profits and losses. The business is yours and no one else's; it's your "baby"!
Entrepreneurial Innovative Behavior
Entrepreneurial innovative behavior can give the entrepreneur a competitive advantage over less innovative competitors and improve chances of becoming a successful entrepreneur. Being innovative can allow an entrepreneur to implement new ideas and use these ideas to build a successful new business. But, there has been an inconsistency with which innovativeness is defined which makes it difficult to grasp the essential attributes (Jafri, 2010; Hurt, Joseph, & Cook, 1977). Innovation has been explained from both a personality and behavioral perspective (Jafri, 2010; Janssen, 2000; Hurt et al., 1977). One definition is that innovative behavior is an individual's openness to new ideas and decision making to adopt an innovation (Jafri, 2010; Midgley & Dowling, 1978). I will soon present the working definition for this paper, but first creativity will be defined.
Innovative behavior is closely related to creativity (De Jong and Den Hartog, 2007), and should therefore be distinguished from creativity. Creativity has been defined as behavior that results in identifying original and better ways to accomplish some purpose (Amabile, 1983; Shalley, 1991; Shalley 1995; Simon, 1985). Another definition has been, "creativity is developing solutions to job-related problems that are judged as both novel and appropriate for the situation" (Simon, 1985; Shalley, 1991; Shalley 1995). Also, creativity refers to both novel and potentially useful ideas; and only when successfully implemented will they be considered innovative (Shalley, 2004; Amabile, 1996; Mumford & Gustafson, 1998).
Finally, creativity can be conceptualized as a step toward innovation (Shalley 2004; West & Farr, 1990) and therefore can be considered an antecedent to innovation. For this paper I will identify entrepreneurial creativity as identifying original and better ways to accomplish a task. And I will identify entrepreneurial innovative behavior as a combination of both creativity and high task performance. Such that, creativity alone is not innovative and high task performance alone is not innovative. You must have both for innovative behavior. Therefore, I propose the following:
Propostition 1: Entrepreneurial innovative behavior will occur when both high entrepreneurial task performance and entrepreneurial task creativity is high.
Goal Setting on Effort and Performance
The concept of setting goals and their impact on task performance has been a vastly studied topic over the years. Goals, which Cooper and Locke (2000) define as, "internal psychological representations of desired states which can be defined as outcomes, events, or processes" can be used to identify and target desired outcomes of self-set tasks (i.e. entrepreneurial tasks). According to goal setting theory, if individuals are given specific, difficult task goals, versus do-your-best goals or no goal, the result will be an increase in task performance (2000), assuming acceptance of the given goal. The specificicty of the goal focuses and directs individual effort and performance (Locke & Bryan, 1969; Frost & Mahoney, 1976) and the difficulty level influences the level of effort which increases individual effort above their usual level of effort (Locke, 1968; Prichard & Curtis, 1973; Frost & Mahoney, 1976). And with the definition of entrepreneur that I introduced earlier, it can be assumed that entrepreneurial task goals will be self-set task goals and that they will be accepted since they were created by the user. Therefore, I propose the following:
Proposition 2: Entrepreneurial task goal setting will influence entrepreneurial task performance, such that, an entrepreneur that sets specific, difficult task goals will have greater task performance than an entrepreneur that sets do-your-best task goals or no task goals.
Proposition 3: Entrepreneurial task effort will mediate the relationship between entrepreneurial task goal and entrepreneurial task performance.
A slight exception to goal setting theory's claim that specific, difficult goals increase task performance, while do-your-best goals do not, may be with the influence of goal setting on creativity. Research has shown that goal setting can affect creativity (Amabile, 1983; Shalley, 1991; Shalley, 1995) and a study by Shalley (1991) found that both difficult-specific creativity goals and do-it-your-best creativity goals significantly increased creativity. But, it should be noted that studies consistently show that difficult goals do increases performance, and creativity, better and beyond that of both easy goals and no goals. For the purpose of this paper I will propose that setting any type of goal to be creative, whether difficult-specific or do-it-your-best, will be positively related to entrepreneurial task creativity.
Proposition 4: Entrepreneurial creativity goal-setting will influence entrepreneurial task creativity, such that, an entrepreneur who sets a goal to have task creativity will have more task creativity than an entrepreneur who does not set a goal to have task creativity.
Keeping with the literature that explains how the impact of goal setting on increased performance is mediated through increased effort, I propose the following for creativity goal setting:
Proposition 5: Entrepreneurial creativity effort will mediate the relationship between entrepreneurial creative goal setting and entrepreneurial creativity.
Affect on Performance
One's work, whether it be part-time or full-time may often be a place of emotional experiences. Ones emotion may influence work, or work may influence emotion. One of the most emotionally involved work environments is that of the entrepreneurs', especially in the early stages of business venture start-up which is full of affective ups and downs (Foo et al., 2009). Not only are entrepreneurs concerned with their business performance and their own task performance, they must also interact and be concerned with customer, employee, supplier, and investor relations.
Emotion is predicted not only to influence how individuals feel, but also their level of work performance (Barsade & Gibson 2007; Beal, Howard, & Weiss 2005). Also, scholars have suggested that affect shapes thought and thought shapes affect (Baron, 2008). In other words, affect may influence entrepreneurial task performance and task performance may influence entrepreneurs' affect, via an individual thought process. Beal et al. (2005) described how affect impacts performance through core cognitive and regulatory processes. Fredrickson and Branigan (2005) showed that positive emotions broaden the scope of attention and thought-action repertoires, while negative emotions narrowed thought-action repertories. But, their study did not show support for negative emotions narrowing the scope of attention.
In addition to the multiple perspectives and accompanying evidence of how affect may influences entrepreneurial performance, it can be assumed that higher individual task effort, on average, will result in higher individual task performance, while low or no task effort will result in lower individual task performance. For example, an entrepreneur putting little or no effort in the beginning stages of an entrepreneurial venture is unlikely to have a higher individual task performance than an individual who is putting in maximum task effort, relatively speaking. That being said, affect has been shown to influence task effort in entrepreneurs. Foo et al. (2009) showed that both positive and negative affect increases effort in entrepreneurs via an affect-as-information process. Specifically, they showed that negative affect increased effort on venture tasks that are immediately required, while positive affect increased effort on venture tasks beyond what is immediately required, showing that both positive and negative emotions have the ability to influence entrepreneurial task effort.
So, in addition to literature linking emotion to task performance through various processes, there is also literature that links emotion to effort, as described above, and increased task effort is likely to influence task performance. But, as described earlier, it has been suggested that positive emotions broaden the scope of attention and thought-action repertoires, while negative emotions narrowed thought-action repertories. Thus, individuals experiencing positive emotions are likely to perform better at tasks than individuals experiencing negative emotions via a cognitive process. Thus, I suggest that affect will impact the relationship between entrepreneurial task effort and entrepreneurial task performance, and between entrepreneurial task creativity effort and entrepreneurial task creativity. Such that, positive emotions will increase cognitive ability, enhancing task performance and task creativity; negative emotions will decrease cognitive ability, limiting task performance and task creativity.
Proposition 6: Positive affect will moderate the relationship between entrepreneurial task effort and entrepreneurial task performance.
Proposition 7: Positive affect will moderate the relationship between entrepreneurial task creativity effort and entrepreneurial task creativity.
Proposition 8: Negative affect will moderate the relationship between entrepreneurial task effort and entrepreneurial task performance.
Proposition 9: Negative affect will moderate the relationship between entrepreneurial task creativity effort and entrepreneurial task creativity.
Entrepreneurial Passion on Effort
Next, there is the concept of entrepreneurial passion which has been identified as consisting of both positive and negative emotions. There is much literature that claims that entrepreneurial passion does exist and is an important part of the entrepreneurial process (Carden et al., 2009). It has been described as possibly the most observed phenomenon of the entrepreneurial process (Klaukien et al.,2010; Smilor, 1997) and a characteristic of many successful entrepreneurs (Klaukien et al., 2010; Cardon et al., 2009). As quoted from Cardon et al. (2005a):
"Scholars suggest that entrepreneurs who experience passion benefit from its motivational energy. Passion involves strength and courage (Bierly et al., 2000), mobilizing energy (Bra¨ nnback, Carsrud, Elfving, & Krueger, 2006), and unflagging pursuit of challenging goals (Smilor, 1997). Passion has been related to drive, tenacity, willingness to work long hours, courage, high levels of initiative, and persistence in the face of obstacles (Bierly et al., 2000; Bird, 1989). Bra¨nnback et al. note that "passion can fuel motivation, enhance mental activity, and provide meaning to everyday work" (2006: 3)."
Passion can be correlated to a diverse range of positive emotions, including
pride (Bierly, Kessler, & Christensen, 2000), love (Cardon et al., 2009; Cardon et al., 2005), enthusiasm, and joy (Smilor, 1997) which provide an emotional resource for coping with entrepreneurial challenges and provides coherence to goal-directed cognitions and behaviors during the pursuit of entrepreneurial effectiveness. (Caron et al., 2009). But, entrepreneurial passion has also been found to correlate with other emotions such as excitement and hope, and negative emotions such as fear and anxiety (Geiger, 2010). Creating and caring for a new business venture can be thought of as a "tale of passion" (Cardon et al., 2005a), and has been compared to creating and caring for a child (Cardon et al., 2005b).
As mentioned earlier, Foo et al. (2009) found that both positive and negative emotions have a positive relationship to effort. And as mentioned earlier I proposed that negative and positive emotions will moderate the relationship between effort and performance (or creativity) differently. I now suggest that entrepreneurial passion, which consists of both positive and negative emotions, will moderate the relationship between entrepreneurial task goal setting and entrepreneurial task effort, and between entrepreneurial task creativity goal and entrepreneurial task creativity effort.
Proposition 10: Entrepreneurial passion will moderate the relationship between entrepreneurial task goal-setting and entrepreneurial task effort.
Proposition 11: Entrepreneurial passion will moderate the relationship between entrepreneurial task creativity goal-setting and entrepreneurial task creativity.
Self-Efficacy on Goal Setting
Self-efficacy has been found to increase performance in various settings. For example, Tierney and Farmer (2009) suggested that creative self-efficacy influences the propensity for individual creativity, but how this occurs is unique to a setting. Bandura (1997) claimed that multiple types of self-efficacy influence performance, but few studies examine the joint influence of different self-efficacies on performance. Self-efficacies are inherent to motivational processes (Ford, 1996; Bandura, 1997; Bandura 1986) and may shed light into how goal-setting play out in both task performance and task creativity (Ford, 1996).
That being said, work has been done that suggests greater self-efficacy leads to an increase in self-set goals. (e.g. Brown, Cron, and Slocum 1998; Locke and Latham 1990; Locke et al. 1984; Wood and Bandura 1989a, 1989b). And stemming from the afformentioned, I will introduce three different types of self-efficacy and claim that they influence goal-setting through a motivational process. They include:
Entrepreneurial Self-Efficacy (ESE): a person's belief in their ability to successfully launch an entrepreneurial venture (McGee et al, 2009).
General Self-Efficacy (GSE): "beliefs in one's capabilities to mobilize the motivation, cognitive resources, and courses of action needed to meet given situational demands" (Chen, Gully, and Eden, 2001).
Creative Self-Efficacy (CSE): "the belief one has the ability to produce creative outcomes" (Tierney & Farmer, 2002).
I propose the following:
Proposition 12: ESE will positively influence entrepreneurial task goal-setting.
Proposition 13: CSE will positively influence entrepreneurial task creativity goal-setting.
Proposition 14: GSE will positively influence entrepreneurial task goal-setting.
Proposition 15: GSE will positively influence entrepreneurial task creativity goal-setting.
The proposed model identifies antecedents to entrepreneurial innovative behavior in the "very beginning" of entrepreneurial venture creation. I did not try to identify antecedents outside the realm of the early stages. The model is specifically representing entrepreneurial tasks that entrepreneurs encounter in the early stages of entrepreneurial venture start-up. And the innovative behavior that I am representing does not ensure an innovative business venture; it only suggests innovative behavior on specific, everyday, individual tasks. With that said, the innovative behavior that I am proposing could be the antecedent to an innovative business venture. In that, if the entrepreneurial arrowhead is followed on all tasks that entrepreneurs encounter during venture start-up, such that the entrepreneur arrowhead is followed repeatedly, this could eventually lead to an innovative business venture.
I feel that I have answered the calling for additional insight into the early stages of entrepreneurial venture creation. This model could have implications for education, researchers, and individuals looking to create a successful business. This model could be used to educate individuals on what is needed to be innovative, which may lead to an innovative business, which may lead to a successful business. Researchers can build off this model. Whether it be improving it or adding to it, this model is a good start in indentifying one strong antecedent to entrepreneurial business venture success, innovative behavior during business venture start-up.